Top-ranked BlackRock had the slowest, but a still impressive growth rate of 17.88%. But BlackRock's iShares ETF group remains the 800-pound gorilla in the market: The firm's $1.29 trillion in ETF assets at Dec. 31 was more than twice the total of Vanguard.

Martin Small, New York-based managing director and head of U.S. iShares, said overall inflows for the company's ETFs in 2016 were $140 billion, an all-time record. He said most of those flows came largely in the second half of 2016; in the first half, flows were lagging 2015.

An improved U.S. economy, investor realization of no immediate departure of the U.K. from the EU after the Brexit vote and a market bump in the U.S. after its elections all helped ETF flows in the second half of the year, he said.

Mr. Small said fixed-income ETF inflows, in particular, were very strong for BlackRock, a trend seen by other ETF providers as well.He said iShares had $60 billion in net inflows in fixed-income ETFs in 2016, accounting for 42% of its total ETF inflows for the year.

Fixed-income ETFs make up around a quarter, $316 billion, of iShares' ETF franchise.

Globally, ETF fixed-income inflows were $114 billion, about 30% of the overall net inflows of $380 billion last year, he said.

“It was a breakout year for fixed income,” Mr. Small said. “There was a dramatic adoption of fixed-income ETFs as a way of managing liquidity and expressing views on markets.”

Nick Good, Boston-based senior managing director and co-head of SSGA's global SPDR business, said increasing adoption of ETFs by institutional investors helped build the firm's business in 2016. Especially, he said, insurance companies were a source of increased business for SSGA.

“We just had a really good year in 2016 … the ETF industry as a whole performed really well,” he said.

Mr. Good said the “post-election bump” after Donald Trump was elected president resulted in strong equity market performance and helped ETF inflows.

Crossing the threshold

Invesco (IVZ) Ltd., with its
Invesco PowerShares Capital Management LLC ETF unit, crossed the $100 billion threshold in 2016, finishing the year with $114.9 billion under management in ETFs it sponsored, a 16.7% rate of increase from the previous year.

Dan Draper, managing director and global head of exchange-traded funds at
Invesco PowerShares, based in Downers Grove, Ill., said the company had around $10 billion in net inflows in 2016. He said inflows into “smart beta” ETFs were particularly strong; $4.6 billion flowed into the company's strategies in that area.

ETF growth occurred in 2016 because of a combination of factors, said Deborah Fuhr, managing partner and co-founder at ETFGI LLP an ETF research firm in London. “The drivers are a general move toward passive, other products are not delivering alpha (and) other products are becoming more expensive,” she said. “So it's really about access, performance and cost.”

The P&I survey also found huge growth in active ETFs in 2016, a 67% jump from 2015. But total active ETF assets still were only $41.54 billion, a fraction of the overall market.